Will Mercedes put Uber out of Business in 10 Years?

Mercedes recently reveled its “driverless” car at CES 2015, and to call it “driverless” is an understatement, the prototype is designed to transform personal transportation and work way beyond being just driverless. And, the hype lived on past CES.

In true Mercedes style, the company mercilessly (and deliberately – we see what you did there Mercedes) allowed us to “peek” at the car on March 4th in San Francisco, which sent car enthusiast and innovation geeks (like myself) on twitter and a fewother social networks abuzz.

The concept, codenamed by Mercedes the F 015, and characterized as an autonomous concept is a mobile luxury office/lounge, with rich digital all-touch immersion, incredibly connected, opulently appointed “car”, that drives itself to locations, while you work/play.

I would codename the car (if we can call it a car) the Mercedes WHPH, but I brand aggressively. Let us stick with the Mercedes F 015 for now.

In a conversation on Facebook with Parisa Nesva Derani (yes this is where the conversation happens sometimes) we debated the cost and timing of arrival. Immediately, I started (to the disgust of the BMW enthusiasts) that I am willing to pay 250,000 USD for a fully functioning version of this concept (I will have to finance it – unfortunately) – and – here is why I would pay that much for the Mercedes WHPH Pod (Oh, I meant the Mercedes F 015).

1. I have been driving for 20 years at an average of two hours per day (low estimate, yesterday I was in the car for six hours), this daily driving timeequates to just over 600 days wasted driving in the last 20 years. This is about a year of sleep, and a year of meetings! LOST! In the next 20 years I can sleep an entire year more which would probably add two years to my life, and work a year more which would probably add 250,000 USD (the price I am willing to pay for the car) to my earnings.
2. My Mercedes WHPH will Uber, Uber. Once it is done driving me, it can go “work” for someone else, and drive (no pun intended) top line revenues to my personal P&L. I am willing to pay 100 bucks for three hours of being driven. Let us assume my Mercedes WHPH can earn an average of 50 USD per day driving others around while I don’t need it, in 20 years it would have earned 365,000 USD, covering its cost of 250,000 USD, and potentially the gas, insurance and maintenance costs of twenty years with the extra 105,000 USD.

Two things are likely to happen. One, the economics, quality of life improvements, and lifestyle change describe above will make this car a steal at 250,000 USD. Two, with enough of these around, Uber will be out of business very quickly. Or will it?

Here is why, the autonomy of the car (the driverless ability) will probably sell at about 100,000 in 10 years, it’s the “mobile luxury office/lounge, with rich digital immersion, incredibly connected, and opulently appointed” that will cost the other 150,000 USD.

So the first car company to nail the autonomous car (at abut 100,000 USD), will take Uber out five years after the launch of the new transformation modality.